Flood insurance extension may be tacked onto another bill in Congress

Washington -- In a rush to resolve several key and long-term policy impasses, congressional leaders are looking to add a five-year flood insurance extension to legislation funding transportation projects and freezing subsidized student loan interest rates at 3.4 percent. The tentative plan is to approve the massive bill Friday. Congressional aides said the motivation for adding the flood insurance bill to the mix is simple: It allows for more savings that Republicans are demanding in return for the higher highway and mass transit funding demanded by Democrats.

Those savings, yet unspecified, would come in large part from the higher premiums allowed in a House-based flood insurance bill and a measure being debated in the Senate. Current law allows increases of no more than 10 percent a year. The House-passed bill would allow premium increases at double that percentage, while the Senate bill would allow increases of up to 15 percent annually.

Sen. David Vitter, R-La., who complained that the dozens of temporary flood insurance extensions approved by Congress over the past eight years generated uncertainty for those who depend on the program, hailed the move to add a five-year extension to must-pass legislation.

"This is a big, big victory for the millions of Americans who rely on flood insurance to safeguard their homes," Vitter said. "The current Band-Aid approach to extending the National Flood Insurance Program for short periods of time has been damaging for both homeowners and the housing market, and getting flood insurance across the finish line will give them peace of mind."

Some Democratic senators complained that attaching a flood insurance extension to the transportation/student loan bill would prevent them from changing requirements that force people living near levees to buy flood insurance, though they paid for the levees designed to minimize flood risks.

Sen. Mary Landrieu, D-La., also has asked for the chance to amend the Senate flood insurance bill. She is concerned that increased premiums will make it harder for low-income residents to afford mandatory flood insurance, and is pushing for an amendment to authorize the Federal Emergency Management Agency to offer premium subsidies based on income.

If the bill is added to the transportation/student loan measure, it's unlikely she will get a vote on her amendment.

Congressional aides said House-Senate negotiators will likely meet late into the night to determine exactly what flood insurance provisions are contained in the House-Senate bill.

Key among the issues to be resolved, as far as 500,000 Louisiana policyholders are concerned, is how much of an annual increase in premiums will be permitted.

Also to be worked out is how to assess the market price for premiums charged to owners of second homes, particularly those built on high-risk beachfront property.